West Hollywood billboard tax initiative to be on the ballot

The West Hollywood City Council certified the Billboard Tax Initiative and met the state’s election code requirements to be on the March, 2011 Ballot. For decades, the citizens of West Hollywood have been exposed to billboards, tall walls, large screen video displays and other off-site signs, part of the iconic Sunset Strip scene—part of the LA culture, if you will.

Tens of millions of dollars in ad revenues are received each year by billboard companies and other off-site signs. Yet, under current law, the billboard companies pay virtually no taxes to West Hollywood for being allowed to advertise in the city.

This initiative, sponsored by Sunset Strip, if passed into law would provide over $4 million of annual revenue for the City to provide added municipal services to the residents of West Hollywood. A 7% excise tax on ad revenues received from the lease of billboards, video signs, tall walls or other off site signs in West Hollywood would be paid to the City and deposited into the General Fund for expanding City services.

Another Tax Billboard Initiative is being sent to the Los Angeles City Council for a vote that will place it on the March, 2011 ballot. The billboard tax proposed in Los Angeles is 12% and will also generate millions of needed revenue for the City of Los Angeles. If approved, the billboard tax would generate over $24 million annually for the city’s general fund, which pays for basic services such as public safety, parks and libraries. Both Tax Billboard Initiatives, said City officials, have modeled the ballot proposal on a billboard tax approved in 2005 in Philadelphia, which has already survived a court challenge by the major billboard companies.

Over 10% of the voters in West Hollywood signed the petition for taxing billboards.

RBR-TVBR observation: Two ways of looking at it: Any tax on advertising is a double tax on a company’s already-taxed revenues. This may generate a court challenge in California as well if the initiative is passed into law. Another way to look at it is there are many communities in which billboards are not allowed. If West Hollywood really didn’t want the billboards, a law could be passed to forbid them. So, this is about money, simply put. California, as we all know, is hurting, and already owes the Federal Government billions in loans. The marijuana initiative is another example of the state finding new ways to generate tax revenue. The initiative may well pass, considering what the dollars are being used for. If it does, West Hollywood may well see some vacant OOH displays.

Carl has been with RBR-TVBR since 1997 and is currently Managing Director/Senior Editor. Residing in Northern Virginia, he covers the business of broadcasting, advertising, programming, new media and engineering. He’s also done a great deal of interviews for the company and handles our ever-growing stable of bylined columnists.